Coworking has taken on a predominant role in commercial real estate (CRE). A panel at GCUC discussed how to take advantage of the financial resources available. The panel consisted of Michael Neiman, Co-head of Savills Coworking and Alternative Workplace Group, Lucia Diana, Global Real Estate at Verizon, Mandi Wedin, Senior Director at Washington Reit, Karen Ward, Head of U.S. Real Estate Investment Banking, and Frank Bistrian, CEO of Work Well Win.
Transition From Leases
It is important to differentiate and package yourself early. We are now shifting from leases to more creative joint ventures structures and percentage rent concepts. It is about who can be the most creative across the portfolios of institutional operators.
One panelist noted that that they are partnering with other groups trying to figure out how to provide their services to office users that have different needs, different flexibility on their terms, and different user groups that need to be addressed. From an office user or employee perspective, the greatest threat to their business is talent — both retention and management. She notes that portion of their business should be helped by real estate. Coworking is a part of that.
Another panelist mentioned how a lot of vacant space above retail branches where there was only access through the retail branches. Those tended to be attractive options because of the cost to get access to the second and third floors. These spaces are getting around to the option of partnering with coworking companies.
Working With a Landlord
One panelist from Los Angeles who works with a landlord said that landlords are starting to tell operators that they have heard it all before. Their messages or enterprises are not entirely unique. It is a land grab but what is it worth if it is not creating an experience. You have to differentiate not only the experience but the ways in which you are communicating that experience to the landlord. Without a track record, it is tough to sell your idea. That is where new structures are so important.